The link to the article is below and even though it is a few weeks ago I still wanted to offer my thoughts regarding the issue.

Americans have been on the receiving end of fraudulent phone solicitations for a long time, as such the story below might not be that unusual. What is unusual to me, and really strikes me as rather amazing is the scope of the operation which was revealed when Indian police busted the network.

India is obviously well know for its outsourcing services within the call center industry. It is not the biggest supplier of outsourced telemarketing services anymore, that rank has been taken over by the Philippines now, but it still is a place where millions work on the phone talking to US customers.

750 Indian nationals were arrested in what must surely be the biggest call center fraud ever perpetuated. The fraud was apparently conducted by using the IRS as the scapegoat and people were coaxed in resolving their outstanding IRS issues through a settlement.

The settlement would typically take place via the purchase of voucher or gift cards which the fraudsters then used to purchase items with the goal to resell those in the open marketplace.

The average daily amount generated this way was apparently 150,000 USD. Considering that the fraud has been going on for quite a while it seems clear that the actual damage might be more than a hundred million US-$.

What is more striking than the actual amount though is the level of sophistication one needs to employ in order to have 750 people involved in an operation like this day in day out. A structure like this needs management, training and supervision to stay on message.

It seems therefor very likely that this level of sophistication is not a just a one time deal but rather the result of a consistent and organized effort. With that in mind I would vouch to say that what the Indian police closed down was simple a part of a bigger network which specializes in that type of fraud.

Cybersecure Software Development has become a much bigger issue in the past 2 years than it has ever been.

The C Suite as well as the Board level of corporations has become painstakingly aware of the issues corporations face when it comes to cyber security. We have had some spectacular breaches of security where the cyber criminals got ff with a boatload of data which ultimately will be used to facilitate some form of crime.

Another aspect of cyber security is straight theft of intellectual proprietary data. (Corporate Espionage). One aspect of corporate espionage is that it happens below the radar and it often times not properly identified by the corporations involved.

The two forms of cyber crime mentioned above are well understood and corporations are doing their best to safeguard their networks and data.

One often overlooked aspect of the problem of how to safeguard data (whether it is customer data or proprietary firm data) arises in the context of outsourced software development.

Market Research shows that more than 90 % of companies use external sources to procure some or all of their software code. (Forrester Research).

The software development operations of any company are an obvious target for corporate espionage. Since the code developed will ultimately be used to power Business Applications any advance knowledge of such code provides a potential significant strategic advantage to a competitor.

The practice to outsource software development is so widespread that it should be an absolute priority for corporations to implement a code of conduct to be employed by the outsourced software development team.

Obviously the implementation of such a code of conduct gets progressively more complicated when the provider resides in countries and jurisdictions which are more difficult to control from far away. Cultural differences and a general lack of awareness of the problem might complicate matters even further.

Never the less...market circumstances dictate that any responsible company makes cybersecure software development a priority in their effort to fend off cyber crime.

One advantage when establishing a Cybersecure Software Environment is that the users of the environment are technically savvy and well aware of what it takes to safeguard their work.

Often times it is the weakest link within an organization which opens the floodgates for a successful penetration of the network. The weakest link is sometimes as simple as an employee who is just not aware of cyber security protocols.

In theory highly skilled developers, even working in remote locations and far away countries, should be able to comply with the steps needed to secure their development work. As such it is one area of cyber security where the remedy is relatively easy to come by.

The issue might exist a bit under the "radar" for the Senior Level...but once attention is paid it might be a rather easy fix.

A lot has been said and written as to the impact Artificial Intelligence (AI) and the eventual integration with Natural Language Processing (NLP) will have on the BPO industry.

If some of the more aggressive forecasts are to be believed up to 70 % of the more clerical support based BPO activities are on the chopping block. Further integration into work processes should extend the reach of AI powered applications all the way into the more complicated tasks currently being outsourced.

Of course...all of this happens in the abstract and it remains to be seen how fast (or if) the new era will approach.

In my opinion it is already here...perhaps not visible to most people yet...but the beginning has been made.

I would like to tell you about a real life example which I was involved in...and which has led to a solution which is liked by the management and the customers.

About 4 months ago we were approached by a company which distributes a SaaS product which is being used by a lot of smaller to midsize companies. The product has rather universal appeal, very limited customization and is a low revenue product with high margins.

Now...the low revenue characteristic of the product is the reason for the rapid adoption...but it also is what has been eating into the profit margins of the company. Simply stated...the product support costs were rather high vis a vis the revenue per customer.

Continued growth of the company has been forcing the company to scale up support staff to deal with inquiries as to the best use of the product. Despite the company limiting support to chat and email for the lower priced plans the support costs were chewing up margins.

Management decided that rather then hiring yet another customer support agent they were going to develop an AI based solution. They consulted with us and we were tasked with he development of a Virtual Agent for chat and email support to handle. to the extent possible, their level 1 support.

One advantage the company has was that the existing support history was rather extensive. They were tens of thousands of emails and chat logs with the Q's and A's needed to develop the Virtual Agent.

As is undoubtedly the case for most organizations...the same questions do repeat themselves. A question might be asked in a variety of different ways...but the answer is often times the exact same one.

With the help of the company we reduced the more than 10,000 support cases to about 200 actual support scenarios.

It had been decided that we were going to use Watson as the backbone of our support agent. We developed a procedure and the required technical tools and went to work.

It took about 2 months to get a Minimum Viable Product (MVP) out of the door. Another months was spent on refining and improving the MVP at a steady clip.

The interesting aspect of the exercise is the result for the company. A couple of things materialized after the deployment:

1.
The company experienced very little negative feedback. Even in a situation where the Virtual Agent was not able to help the customer a built in escalation feature to a live operator resulted in high customer satisfaction ratings.

2.
Key Performance Indicators (KPI's) the company had been using to measure customer satisfaction for their support rose across the board. Due to the immediate availability of the Virtual Agent (no need to wait for a live operator) KPI's rose rather dramatically in the areas of expediency and quickness of response.

3.
The company was able to migrate level 1 support staff to level 2 support and avoid the hiring of additional personnel

4.
The costs associated with running the agent (IBM charges for each API query) resulted in net reduction of approximately 75% in total support costs.

5.
Perhaps most beneficial for the customers...the company went to a 24/7 level 1 support after about 6 weeks of usage for the Virtual Agent.

6.
The Virtual Agent has been getting better. It goes without saying...but the "intelligence" aspect of the agent results in better answers over time.

All in all the company views the implementation of a Virtual Agents as a huge success. Customers are satisfied and the company estimates that it will reduce hiring, given current growth rates, by about 5 bodies.

Of course..the real life example cited above cannot necessarily be the blueprint for every company. Not every support scenario can be successfully resolved through the use of a VA. Never the less though...AI is here to stay and slowly but surely it will work its way into real life support situations.

The consequences will be felt...for some providers of BPO companies rather soon...for other companies

it might be years before they will feel the impact.

There is little doubt though that once corporations go the AI VA route the consequences for BPO companies can be dramatic.

Most of us have heard the occasional warning from the IRS that the caller on the other line pretending to offer you a bargain on unpaid tax dues might be a scam artist. The scam usually culminates in the recipient of the call settling the debt for a token amount (or a large amount) with the money disappearing into cyber space.

Unfortunately there are plenty of victims to be found. The scam has been proliferating and does not seem to be running out of steam anytime soon.

What is usually not so well understood is where the crime originates. Some light on the practice has been shed by an Indian newspaper which reviewed some of the enforcement actions taken by local police to combat call center crime.

In one such action Police arrested 700 (!) people connected with call centers set up in India with the sole purpose to call US citizens and impersonate IRS collection officers. The daily revenue generated this way came out to approximately 250,000 US-$ or about 7.5 Mio a month. (close to 100 Mio per year)

The average monthly revenue per call center agent was therefor about 10k. Considering that the call center agent should not cost more than US-$ 500 per month...a rather profitable venture.

The Outsourcing / BPO industry is constantly looking for better solutions to address their needs. One country which has consistently been rising in the ranks and has become the "hot' destination in Europe is Romania.

In the latest ranking by Colliers International Romania managed to climb 5 spots and is now ranked as number 13 in the Global Services Location ranking. It has left countries like Hungary (32) , Czech Republic (26) and Ukraine (24) solidly behind it. If the trend continues it might be able to overtake its only remaining regional competitor Poland (10) within the next few years.

The ranking takes into account things like costs, business climate and the quality of the work force.

Romania's climbing up the rank is driven by its well qualified IT workforce which is graduating at a steady clip from its Universities.

Another advantage all of central and Eastern Europe enjoys is the relatively better time zone they are operating in when dealing with clients based in North America. Most European countries are about 7 hours ahead of Central Standard Time (Chicago).

Compared to the 800 pound Gorilla in ITO , India, this represents a clear advantage. India as well as most of Asia is squarely on the other side of the clock. Hence dealing with a European software team might be a bit easier.

One disadvantage all of Europe has compared to India and most of Asia is that the depth of the talent pool simply does not compare. Overall there are estimated to be about 600,000 employees in the outsourcing sector for all of Central and Eastern Europe. That compares with about 3.5 Mio for just India.

Never the less though...Romania and its other European peers are making steady inroads into the BPO and ITO industry and that trend should continue for the foreseeable future.

I am a firm believer in the concept of outsourcing non core functionalities. Functions which are not mission critical to your business and are not part of your core expertise can very successfully be outsourced without impacting operational performance.

In practice that means that almost any business can outsource functions like Accounting, Bookkeeping, Human Resources, Data Entry, Scheduling and so on....

If done right outsourcing these functions will reduce opex spent while improving or at the very least maintaining Key Performance Indicators (KPI's).

One function which is always on the radar for being outsourced is the Strategic Marketing. Strategic Marketing is what is responsible where the marketing dollars are spent..and for the subsequent evaluation if the dollar spent has produced the desired result.

Perhaps most importantly...Strategic Marketing is what drafts the message for the company. In essence it is responsible for the overall perception of what any new customer might think of the business.

Clearly...the actual task of marketing in non core to pretty much every business. As such the theory goes that it is fair game for being outsourced. At the same time though....Strategic Marketing is what the company needs to do right in order to be successful in the marketplace. Therefor the decision to outsource the Strategic Marketing should not be made lightly.

Below are the key points one should consider before deciding if it can be outsourced.

Do You Have A Resource Gap?
First you need to evaluate why you are considering outsourcing Strategic Marketing. Is it simply for cost reasons or are you looking to gain additional expertise ? If you feel that you have a resource gap, either in intellectual capacity or just in terms of manpower...outsourcing could be a viable for your company.

Do You Have Short Term Needs Or Long Term Marketing Needs?
If you decide that you have a skill and/or resource gap you need to evaluate if the gap is short term or long term. As an example...you are rolling out new products and your marketing department is not sufficiently staffed to cover the roll-out properly. Is that short term resource gap driving your desire or do you have long term ongoing needs ? If you just have short term needs you might be better off to muddle through....if your needs are long term outsourcing might be an option.

What Is Your Core Competency ?
This one is important. If you feel your Marketing Messaging needs to be fully under your control and you have the need to be intimately involved...chances are marketing is one of your core competencies. If on the other hand marketing is more running alone with everything else you have going on... it might be worth while to consider outsourcing it.

Do You Need A Fresh Approach / Fresh Thinking ?
Consistent Messaging is what today's brands are all about. You build brand reputation by consistently staying on message to make sure that your customer understand why you are the best solution. Sometimes though it might be necessary to introduce fresh thinking into the process. Your marketing might have become stale...and thus not generating the impact you want it to have in the marketplace. If that is the case..outsourced marketing might help your company.

Do You Need Specialized Skills Which Are Difficult To Come By?
Sometimes your marketing team might need specialized skills which are difficult to come by. This might happen in a case where your company introduces a completely new product category or you want to use a marketing approach which has simply not been done before by your In House team. If that is the case outsourcing might be a good option.

Generally speaking I am not a big fan of outsourcing the Strategic Marketing. Even though it does not fall into the "Mission Critical" category it is very important longer term.

However...if after reviewing the questions above you walk away with the realization that you are a candidate, by all means...I encourage you to outsource Strategic Marketing.

As is always the case when it comes to outsourcing...your BPO partner will make the difference in determining if your outsourcing venture will be successful .